Non-oil sector can sustain economy, says Army chief

The Federal Government has been advised not to depend solely on oil export earnings, but to pay more attention to the non-oil sector to sustain the economy.

Speaking during the breakfast briefing of the Institute of Directors of Nigeria (IOD) in Lagos, the Chief of Army Staff, Lt.-Gen. Azubuike Ihejirika, represented by the Chief of Accounting and Budget, Maj.- Gen. Abdullahi Muraina, blamed the lingering economic stagnation, rising poverty level and the decline of public institutions on poor economic management

Speaking on the theme: The role of the Armed Forces in economic development, Ihejirika said the fluctuations in public expenditure has reflected both the over-reliance on oil earnings and weak fiscal discipline by previous governments, adding that unstable fiscal spending also tends to cause real exchange rate volatility.

He said the fiscal expansions financed by oil revenues often result in domestic currency appreciation, creating what he described as Dutch-disease concerns and reducing competitiveness of the non-oil economy

The Army chief saidlack of infrastructural development has hindered public investments, adding that this has slowed down private sector activities over the years.

He blamed the poor condition of the power sector on the country’s infrastructural shortfall.

Meanwhile, per capita power consumption in Nigeria has been estimated at 82 kilowatts (kw) compared with an average of 456kw in other sub-saharan African countries, and 3,793kw in South Africa.

Ihejirika said Nigeria’s economic performance prior to economic reforms was generally poor, adding that between 1992 and 2002, the yearly GDP growth averaged about 2.25 per cent with an estimated population growth of 2.80 per cent per year.

This implied a reduction in per capita GDP over the years, which he noted, has worsened the living conditions of most Nigerians. He said the inflation levels are high, averaging about 28.94 per cent per annum over the same period.

He said human development indicators in Nigeria compare favourably with those of other least developed countries, but regretted that widespread corruption has destablised the effectiveness of various public expenditure programmes, he, however, expressed confidence over the attainment of macroeconomic stability which, he said, had provided a platform for improved growth performance in the recent time

He observed that the growth rates have averaged about 7.1 per cent yearly for 2003 to 2006. This, he said, was a notable improvement on the performance over the decade before the reforms when yearly growth rate averaged about 2.3 per cent.

The President of the institute, Thomas Awagu, who reiterated his commitment to advancing the economic development of the nation, said the institute would continue to establish contact among business leaders at the highest levels and partner withthe government for the creation and entrenchment of favourable business friendly policies in the country.